The California State Teachers Retirement System is investing in U.S. multinationals to help provide over half its returns for its 850,000 members and beneficiaries, Chief Investment Officer Christopher Ailman told CNBC Tuesday.
Over two-thirds of Calstrs' 55.1 percent allocation in "global equities" is in U.S. companies, he said.
"Right now we prefer the home-country bias. You’re getting international through the U.S. stocks as well. I’d rather invest in U.S. companies doing business in China than lots of little Chinese companies and worry about the market," he said.
Calstrs, the nation's second-largest pension fund with $150 billion in assets, is invested to create a "consistent return of closer to 8 percent" in order to meet long-term retiree obligations, Ailman said.
Like most investors, the pension fund has seen weakness in two areas: fixed income, which makes up 17.5 percent of its portfolio, and real estate, at 11.5 percent.
The fund has to keep fixed income investments at that 17.5 percent minimum, he said, but the fund is buying more short-term instruments.